A group of lymphocytes called natural killer (NK) cells can kill several kinds of cells almost indiscriminately. Although NK cells serve useful functions in immune responses against certain viruses, parasites, and tumor cells, they are also dangerous as they exhibit potent killing activity. Therefore, the mechanisms in place to prevent killing of normal cells by NK cells serve an essential function. It is important to understand how such regulation of NK activity is achieved. The killing of normal healthy cells is prevented by inhibitory receptors on NK cells that recognize surface molecules called major histocompatibility complex class I (MHC class I). A major goal of this project is to define the molecular basis of MHC class I recognition by the inhibitory receptors on NK cells and how recognition of MHC class I by the receptor results in a negative signal transmitted to the NK cell. In addition, the regulation of NK cell activity by inhibitory receptors serves as a model to study other receptor systems that use a similar mode of negative regulation. NK cells express a family of related molecules called killer cell immunoglobulin-like receptors (KIR). KIR exert their inhibitory function by recruiting the tyrosine phosphatase SHP-1 to an amino acid sequence motif, called immunoreceptor tyrosine-based inhibition motif (ITIM), in their cytoplasmic tail. Three members of the KIR family are specific for the human MHC class I molecules HLA-C. Biochemical experiments established that KIR can form two types of dimers, each of which binds HLA-C with greater affinity than the KIR monomer. Significant progress was made in understanding how KIR inhibits NK cell activation. Binding of KIR to HLA-C on target cells prevented the phosphorylation of the activation receptor CD244. Therefore, KIR molecules can act at a step as early as phosphorylation of an activation receptor. One of the earliest steps in target cell recognition by NK cells is the formation of a conjugate that involves adhesion molecules. An assay for conjugate formation was used to show that adhesion to a target cell expressing cognate HLA-C was disrupted by KIR engagement. Conjugate formation was interrupted abruptly by KIR within less than five minutes. Inhibition of adhesion to target cells was mediated by a chimeric KIR molecule carrying the tyrosine phosphatase SHP-1 in place of its cytoplasmic tail, showing that SHP-1 can inhibit signals that lead to cell adhesion. These results suggest that other ITIM-bearing receptors, many of which have no known function, may regulate adhesion in a wide variety of cell types.